FTSE Reshuffle: Who’s In, Who’s Out?

It was time for Abrdn to leave, and ConvaTec to enter

Sunniva Kolostyak 1 September, 2022 | 11:37AM
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It’s FTSE reshuffle season, where UK companies are promoted and demoted from its indices. This quarter, Abrdn (ABDN), Hikma Pharmaceuticals (HIK) and Howden Joinery Group (HWDN) are the three victims, and have all been axed from the FTSE 100.

The demotion of Abrdn did not surprise the market. The investment company is down more than 40% this year and FTSE last week indicated that a deletion could be on the cards. This, too, was the case for medicine producer Hikma, which is also down about 40% in 2022.

The third company, Howden Joinery – down 40% too – sells kitchen and joinery products. It had a big uptick during the pandemic as many saw an opportunity to spend more on home upgrades, but its share price has been declining steadily for the past year.

This left room for three promotions: medical equipment company ConvaTec Group (CTEC), the world’s oldest investment trust F&C Investment Trust (FCIT), and oil and gas business Harbour Energy (HBR). Over the past year, they have returned around 10%, -10% and 30%, respectively.

The promotion of ConvaTec and F&C was also flagged in FTSE’s indicator last week, which based its calculations on data from August 19.

FTSE 250 Changes

Moving on to the FTSE 250, there are five new companies, meaning five others were relegated. Newly minted are Bluefield Solar Income Fund (BSIF), NextEnergy Solar Fund (NESF), PureTech Health (PRTC), Twentyfour Income Fund (TFIF) and Warehouse REIT (WHR).

At the other end we have Chrysalis Investments (CHRY), Greencore Group (GNC), Provident Financial (PFG), Tyman (TYMN) and XP Power (XPP), all exiting the index.

How it Works

The changes are based on companies' closing values on August 30. Changes are implemented at the close of business on Friday September 16, and take effect from the start of trading on Monday, September 19. It’s a quarterly event and the last reshuffle reflected the fallout from the Russian invasion and sanctions on London listed companies.

Why does the three-monthly reshuffle matter for investors?

Such changes give an insight into which sectors are in and out of favour, and which companies are on the up or struggling in the big league.

Index provider FTSE Russell changes the constituents of its indices every quarter to reflect changes to Britain’s biggest companies. Which companies move in and out of the FTSE 100 is based on their total market capitalisation at the end of the specified trading day.

To avoid the same borderline companies dropping out and back in every reshuffle, a company must be in the top 90 by market cap to be promoted. Likewise, to be demoted, the firm has to be below the 110th biggest company by size.

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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About Author

Sunniva Kolostyak

Sunniva Kolostyak  is data journalist for Morningstar.co.uk

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